Mumbai: In a major concession to the farmers’ lobby, the Bharatiya Janata Party (BJP)-led government in Maharashtra on Sunday announced a sweeping farm loan waiver with certain conditions to ensure the scheme benefits only marginal famers and “genuine farmers” who have been paying off their loans.

Maharashtra is the only state that has agreed to give a total farm loan waiver.

The government waived the farm loans of marginal farmers—3.1 million out of the total 13.6 million registered farmers—with immediate effect. While the farm loan waiver for marginal farmers will cost around Rs30,500 crore, the cost of the total farm loan waiver is not known. Last week, Chief Minister Devendra Fadnavis had announced loan waiver for marginal farmers but ruled out a blanket waiver on the grounds that it would cost the government “an unaffordable Rs1.14 trillion”.

Announcing the waiver, Maharashtra revenue minister and senior BJP leader Chandrakant Patil told a press conference, “Those farmers have to be helped who have repaid their loans regularly so that the credit culture and discipline is not disturbed. The committee will link farm loans with the farmers who are dependent on farming as their only means of livelihood and who deserve relief. Farm loans of all such farmers are being waived off.”

The move came after Fadnavis last week prepared the ground for what he called the “biggest farm loan waiver in the history of Maharashtra”. Patil was joined by farm leaders and members of the farmers’ steering committee which had spearheaded a stir in Nashik, Ahmednagar, Kolhapur, Sangli, and Pune districts since 1 June.

Patil, who heads a group of ministers empowered to talk to farmers, made the announcement after a three-hour discussion with around 35 representatives of farmers’ organizations and lobbies.

Farm leaders who attended the meeting told a joint press conference that they were calling off the protest with immediate effect. “If these demands are not met by 25 July, we will resort to an even more powerful protest,” said Swambhimani Shetkari Sanghatana president and lawmaker Raju Shetty.

Other leaders like the steering committee convener and Communist Party of India (Marxist) or CPM functionary Raju Nawle and Shetkari Sanghatana leader Raghunath Patil welcomed the decisions and hailed “the historic farmers’ protest and unity”. Shetty, Nawle and Raghunath Patil said they will keep up the vigil and await implementation of the decisions failing which they warned a bigger stir.

The farmers’ strike call was originally given by the Kisan Kranti Jan Andolan in Puntamba village of Ahmednagar district. But the farmers from Puntamba called off the strike on 3 June after talks with Fadnavis, who assured them that 70% of their demands would be accepted. Other farmer groups and lobbies had, however, protested this and accused Fadnavis of seeking to break their unity. The Nashik-based farmer groups continued their strike and later formed the steering committee.

While Chandrakant Patil and farm leaders did not say how many farmers, apart from indebted marginal agriculturalists, will benefit from the loan waiver, Maharashtra agriculture and co-operative department officials estimate that this number is in the range of 5 to 6 million.

“Since 2012, around 3.1 million marginal farmers have been ineligible for fresh credit because their farm loans have turned outstanding. The farm loan waiver would benefit them with immediate effect. There are around 7 million farmers who have taken crop loans or short-term credit from co-operative and commercial banks. Modalities will have to worked out but a rough estimate suggests that some 5 to 6 million of these would benefit from the total loan waiver,” said an agriculture department official requesting anonymity.

Minister Patil said that the loan-waiver for marginal farmers in Maharashtra would be with immediate effect from Sunday. “These farmers would be eligible for fresh credit from tomorrow,” he added.

Patil did not say if the financial cost of the waiver had been budgeted for or if the government would look at options like issuing bonds to raise the money. Later, Fadnavis tweeted that details of farm loan waiver would be worked out by the joint committee of government and farmers’ representatives.

To work out the modalities of the total farm loan waiver, Maharashtra government has decided to form a committee that would also have four representatives from the farmers’ groups that carried out the protest.

Raju Shetty said, “We are on the committee and we will help the government identify the genuine farmers who deserve this,” Shetty said.

Chandrakant Patil also said the rate of milk would be increased by 20 June. “We will also work out a milk pricing formula on the lines of the fair and remunerative price for sugar cane by which farmers will keep 70% of the profit and government will keep 30%,” Patil said. The farmers had demanded that milk price be raised to Rs50 per litre.

On the other key demand of implementation of the recommendations of the Swaminathan Commission, the government and farm leaders have agreed to take a joint delegation to Prime Minister Narendra Modi. “The state government recommends minimum support price for crops grown in Maharashtra but the final price that is determined by the Centre is almost always lower than what the state recommended. This causes loss to farmers in Maharashtra. We will take a delegation to the Prime Minister and request him to ensure that this loss is offset,” Patil said.